Accountable Care Organization (ACO) Regulations: First Look

David Harlow

First published on 4/3/11 and 4/5/11 on Health Blawg

ACO regulations and related federal issuances hit the street last Thursday, after several months of waiting — from CMS, OIG, FTC, DOJ and IRS.  They cover the waterfront, ranging from the central regulation defining the structure and workings of the ACO, to  limited Stark self-referral ban and anti-kickback statute waivers in the fraud and abuse arena, to new frameworks for antitrust analysis, to rules governing joint ventures involving taxable and tax-exempt organizations.

I had the opportunity to discuss the regs the day after they were issued on a special edition of the Blog Talk Radio show, ACO Watch, hosted by Gregg Masters(@2healthguru).  Gregg’s guests included Mark Browne (@consultdoc), Vince Kuraitis(@VinceKuraitis), Jaan Sidorov (@DisMgtCareBlog) and yours truly (@healthblawg).  We are geographically diverse, and bring a variety of perspectives to the table.  I invite you have a listen — we enjoyed the opportunity to discuss the rules, we all learned from each other, and we hope you enjoy the conversation as well.  (It runs about 90 minutes.)

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Tire Kickers Need Not Apply – 8 First Impressions of the Medicare ACO Rule

Vince Kuraitis

First published 4/1/11 on e-Care Management

On March 31, CMS released the long-awaited “Medicare Shared Savings Program: Accountable Care Organizations” document (ACO Rule). Read the details here (strong suggestion: unless you’re working on your PhD in ACOs, start with the fact sheets).

There are many surprises. Here are eight first impressions on this 429 page tome:

  1. The bar has been set high…very high.  Tire kickers need not apply.
  2. Don’t expect to see many or any small ACOs.
  3. Patients will be confused by ACOs.
  4. Concerns over maintaining competition and avoiding antitrust are being taken seriously.
  5. CMS scores points for coordinating the ACO Rule across Federal agencies.
  6. CMS loses points for micromanagement and a controlling mindset.
  7. Possible losers — hospitals, ACO vendors.
  8. Possible winners — physicians, health plans.

The details follow.

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FAQs on Accountable Care Organizations

Jenny Gold

First published 3/31/11 on Kaiser Health News

Accountable care organizations take up only seven pages of the massive new health law yet have become one of the most talked about provisions. This latest model for delivering services offers doctors and hospitals financial incentives to provide good quality care to Medicare beneficiaries while keeping down costs. A cottage industry of consultants has sprung up to help even ordinary hospitals become the first ACOs on the block.

Ignoring Primary Care, Obscuring The Obvious

Jeff Cohen

First published 3/24/11 on ACO Watch

Healthcare reform used to imply just regulatory change.  As time marches on, it also implies market change.  Most pundits agree that, whatever happens to the healthcare reform law, whether or not it is found to be unconstitutional, the healthcare business community is unleashed.  Change is afoot!

If you follow my naysaying on the issue, then you know I believe the expectations regarding ACOs are overblown and unrealistic.  Martians will not land here en masse, although there may be an occasional stow away on a NASA craft.  Put another way, as some others have said, ACOs are like unicorns—magical, mythical beasts that no one has ever seen.  I don’t expect many to come prancing around in Florida, at least not South Florida, anytime soon.

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ACO’s: Missing Accountability from a Very Critical Stakeholder

Wendy Lynch

First published 3/10/11 on the Altarum Institute Blog

Imagine you decided to run an Accountable Car-Care Organization.  The government announced you would no longer be paid on repairs alone, but for keeping cars on the road and out of the garage. You might contract with qualified teams of mechanical providers, from oil-change garages for preventive maintenance, tow-truck drivers for emergencies, to specialist mechanics for very technical repairs.  Next, you assemble secure, integrated information technology to track the care each automobile receives across providers and assign each license plate number to a vehicle-centered mechanical home. Finally, you determine specific outcomes and standards of practice to keep engines running better. Under ACCO rules, you are ready to start earning performance bonuses.  Right?

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Measuring Patients’ Experience of Care


First published 2/9/11 on Health Blawg,

There is a growing recognition within the medical-industrial complex that the patient is a key element of the enterprise, and that patient satisfaction, patient experience, patient engagement, patient activation, patient-centeredness are very important.  Some research shows that patient activation yields better patient outcomes, and that patient activation can be measured.

Patient-centeredness and patient engagement are two of the key metrics to be used by the feds in describing Accountable Care Organizations (ACOs), if the internecine battles within government are resolved soon enough to actually release draft ACO regulations in time to allow for sufficient advance planning for the January 2012 go-live date.  (Wearing one of my many hats, I’ve had the opportunity to submit a response to CMS regarding the RFI on these metrics on behalf of the Society for Participatory Medicine.)  These measures go into the Meaningful Use hopper as well, as Meaningful Use Stage 2 metrics are being reviewed.

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ACOs and Anti-Trust


Originally published 1/3/11 in The Fiscal Times

Beyond the legal challenges, a major new hurdle is emerging for the health care reform law. Recent studies show that the major players in the health care marketplace – insurers, hospitals and physician practices – are consolidating, which increases the likelihood they will collude on prices charged to employers and to consumers and defeat cost control measures in the law.

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Tectonic Forces At Work


Originally published 1/31/11 on [Not] Running A Hospital

We are about to witness the clash of two tectonic plates in health care. The creation of Accountable Care Organizations, combined with a movement towards capitated and other types of bundled payments, will be forces towards integration of care across the continuum. From primary care to tertiary care to skilled nursing and rehabilitation, principles of care management will combine with financial incentives to create ever more concentration in the health care market. Proprietary electronic medical records systems and “captive” doctor organizations will work towards reducing consumer choice in this new environment.

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Will Accountable Care Organizations Just Become HMOs in Drag?


Originally published 1/31/11 on The Doctor Weighs In

Accountable Care Organizations (ACOs) are supposed to be provider-led (physician groups +/- hospitals) and, they are supposed to inject a new accountability, at the provider level, for the value of services delivered.  You know the old equation.  VALUE=QUALITY/COST.  Those of us inside the health policy “beltway” know this mantra well.  We have been talking about it for years (decades, really).

I spent almost 6 years working as a consultant to General Motors Corporation starting in the late 90’s.  My job was to systematically evaluate health plans’ quality programs so that GM could determine the value the plans were bringing to their employees.  My team and I helped develop an elaborate Request for Information process that is now known as eValue8.

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Gregg Masters Interviews Brian on ACO Watch

Gregg Masters is a long time health care manager and analyst who now, among many other things, hosts a health care talk show, ACO Watch, focused on Accountable Care Organizations and what they’ll mean in the health care marketplace, if indeed they do come to fruition in a way that can drive down cost and improve quality.

On January 19th, Greg and I spoke about ACOs, the incentives required to make them work, my skepticism that they can be effective and why, as well as the primary care medical homes that will be required at the front end of the health systems’ networks, acting as independent fiduciaries, for them to get meaningful traction in eliminating waste and promoting appropriate care.

This was done over a phone, so the quality is a little compromised. The show is right at 30 minutes, but the first few will give you a flavor.

Because Gregg is well connected and extremely knowledgeable in health care, he’s lined up a terrific list of health care experts who can speak effectively to different dimensions of ACOs. On the right sidebar, I’ve posted a button that will take you to the most recent edition of ACO Watch. I’ve been listening lately, and found the interviews short enough to be digestible and manageable, given my schedule, entertaining, and most important, useful.

ACOs: A Work in Progress


On March 23, 2010, after a year of tumultuous debate, the Patient Protection and Accountable Care Act (“ACA”) was signed into law by President Obama. (1)  ACA is the most significant legislation regarding healthcare since the passage of the Social Security Act of 1965, which established Medicare.   For hospitals and physicians, ACA contains provisions designed to materially change the manner in which healthcare is delivered to Medicare and Medicaid patients and the way healthcare providers are compensated for such services.

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Harvard Pilgrim Health Care Goes Its Way, Thoughtfully


Originally published on Not Running A Hospital

Harvard Pilgrim Health Care HomeLots of people are thinking about the form of payments between insurance companies and providers for health care services, but it is also important to think about how each such approach would be marketed as an insurance product to the population.

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Community Hubs of Wellness & Health (CHWH) In Accountable Care Organizations (ACOs)


Originally published 1/13/10 at Private Views

Hospitals are going to change. What worked in the past will not work in the future. The passage of the federal health care reform law and the inevitable transition from fee for service to global payments is changing the rules of the hospital game. Hospitals will have to make do with less financial support from both government and private payers and at the same time deliver higher quality health care with measurably better outcomes. Hospitals will take care of fewer and fewer patients as care continues to migrate to the outpatient setting, the home, and wherever citizens live carrying their smart phones. The development of Accountable Care Organizations (ACOs) to receive and distribute these global payments will affect hospitals whether they decide to take a leadership role or a wait and see attitude.There will be winners and losers among hospitals; there will be fewer hospitals in America in ten years than there are today in 2011.

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Accountable Care Organizations: The Emperor Has No Clothes, Or, Jeff Goldsmith’s Plan B


Originally published 1/06/11 on HealthBlawg

The current all-ACO issue of Health Affairs includes a piece by Jeff Goldsmith entitled: Accountable Care Organizations: The Case For Flexible Partnerships Between Health Plans And Providers.  It is a proposal for how private sector health plans ought to pay for services, in order to save us all from what Goldsmith sees happening in the near future thanks to the Gold Rush mentality among health care provider organizations working to become ACOs before they’ve been defined in regulation.

Continue reading “Accountable Care Organizations: The Emperor Has No Clothes, Or, Jeff Goldsmith’s Plan B”

Accountability? Heaven Forbid!


Originally published 1/10/11 on Running A Hospital

At a recent talk, Dartmouth’s Elliott Fisher facetiously remarked that we cannot yet be sure whether accountable care organizations (ACOs) will actually be accountable, caring, and organized. Well, if some providers have their way, they certainly won’t be accountable.

This story by Jordan Rau in the Washington Post relates comments being made as Medicare writes its rules governing the ACOs. Here are some quotes: